INTC Intel Corporation

By Asa Fitch 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (May 9, 2020).

Intel Corp. Chief Executive Bob Swan has seen his workforce renew the get-to-it spirit embodied in the "only the paranoid survive" maxim coined by the company's former CEO Andy Grove.

Mr. Swan's next challenge is to keep the momentum going after the coronavirus pandemic's intense influence on business fades.

"It forces us to step back and ask ourselves, how is it in moments of crisis we are able to get so much done so fast?" he told The Wall Street Journal. "How do we continue that pace in a more normal environment?"

Mr. Swan, Intel's boss since 2018, is seeking a more efficient way of operating at a tech behemoth. The chip maker has more than 100,000 employees spread across 46 countries. It takes multiple layers of management to keep it running.

Intel's future will include allowing managers under the CEO to have more direct decision-making responsibility -- something Mr. Swan had been pushing before the pandemic, but has gained speed since.

He has been encouraged by the way lower-level managers have often eschewed approval from superiors for important decisions that couldn't wait. He's already looking at ways to cut out red tape permanently.

"I think sometimes we forced them to come and ask for permission, but hey, if you know the right thing to do, just go do it. And we'll figure it out later," he said.

The company's response to this crisis drew on lessons learned more than 15 years ago, during the SARS epidemic. A Pandemic Leadership Team was put together in the aftermath of that crisis, and was reconvened to deal with the coronavirus.

Mr. Swan's path forward is informed by the problems that Intel encountered during the pandemic, and how the company's structure and processes responded to address them.

For instance, as the pandemic spread, many customers ordered more chips for PCs that were in high demand as employees shifted to working from home. Cloud-computing giants, including Amazon.com Inc. and Microsoft Corp., also wanted more chips to cater to growing demand in the work-from-home economy.

This increase in demand coincided with much of global air transport being grounded, making moving goods around the world a logistics challenge that constantly evolved. Intel also had to negotiate to keep its factories running after many governments where it operates -- including its hometown of Santa Clara, Calif. -- closed nonessential businesses.

Intel managers had a head start as they were already dealing with upheaval due to a shortage of Intel processors. A war room was set up in November, even before concerns about a new coronavirus surfaced.

That room morphed into a hub for addressing pandemic-related supply-chain issues in the months to come. The team participates in twice-daily meetings, three days a week. One of their tasks: keeping activities of its roughly 16,000 suppliers in sync with those of 2,100 customers who typically place about a million orders a year -- something that can be a challenging even in stable times.

Seeing a limited availability of commercial flights to move items, executives signed off on chartering planes to move parts within Intel's globe-spanning manufacturing footprint. The flights moved goods between warehouses and other facilities in Vietnam, Hong Kong, China and Japan.

To keep factories humming, stockpiles of raw materials needed for chip-assembly and testing operations were increased by at least 30 days, while spare-parts inventories at chip factories were extended to 45 days' worth.

Engineers, meanwhile, are now using remote digital access to labs to continue research projects.

Mr. Swan leaned on redundancies in Intel's internal manufacturing. The company has several factories that can make its most advanced chips, Mr. Swan said, meaning if one is disrupted, others can pick up the slack.

"We have to move things around all the time," he said.

All the lessons from the pandemic have yet to be captured, Mr. Swan said, but what's going on currently in the workplace and society likely will underpin Intel's future business. As people use remote-access services to work, and social distancing likely remains an office norm even as the economy opens, demand for computing power will only increase.

"The things we're doing out of necessity are going to become things we do because they're logical," he said.

Write to Asa Fitch at asa.fitch@wsj.com

(END) Dow Jones Newswires

May 09, 2020 02:47 ET (06:47 GMT)

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